As part of the 2017 Tax Act, Republicans enacted a new 1.4 percent excise tax on the net investment income of private university and college endowments. The tax applies to schools with over $500,000 in assets per tuition-paying student. Now, just weeks after enactment, Rep. Tom Reed (R-NY) is working on a bill to repeal the tax, in exchange for assurances on how the endowments are used.

Rep. Reed noted that the tax was enacted as a means of holding universities accountable for their spending. The lawmaker believes introducing measures to ensure that colleges are using their endowments to lower tuition could encourage good actors. Rep. Reed noted that he is working with other offices on legislative text — he hopes to introduce a bill this May to coincide with college graduations.